Osisko Gold Royalties Ltd (NYSE:OR) Q1 2019 Earnings Conference Call Transcript

May 02, 2019 • 10:00 am ET

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Osisko Gold Royalties Ltd (NYSE:OR) Q1 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good morning, ladies and gentlemen, and welcome to the Osisko Gold Royalties' Q1 2019 Results Conference Call. After the presentation, we will conduct a question and answer session. (Operator Instructions) Please note that this call is being recorded, today, May 2nd, 2019, at 10 a.m. Eastern Time.

Today, on the call, we have Mr. Sean Roosen, Chair of the Board of Directors and CEO of Osisko Gold Royalties; Mr. Bryan Coates, President; and Ms. Elif Levesque, Chief Financial Officer and VP Finance.

I would now like to turn the meeting over to your host for today's call, Mr. Sean Roosen. (Foreign Language)

Executive
Sean E. O. Roosen

(Foreign Language) Welcome to the call everybody. We're working from our presentation on our website, Q1 results for Osisko Gold Royalties. As you look at the presentation, we have a forward-looking statement there that we'd like everybody to review because we will be making some forward-looking statements and examining some other aspects that are outside of our control.

On to page 3 of the presentation, the highlights for Q1 of 2019, we earned just under 20,000 GEOs at 19,753 ounces, revenues from royalties and streams sat at CAD33.5 million, up nearly CAD1 million quarter-on-quarter for 2018, and net cash flows from operating activities stood at CAD24.8 million, up another CAD1 million from quarter-on-quarter for 2018.

We have a net loss of CAD26.5 million attributed to us which is the extension of the impairment of a tax pool. Incurred an impairment charge of CAD38.9 million on the Renard stream, which we'll talk about. We have adjusted earnings for CAD5.8 million or CAD0.04 per basic share for the

quarter.

We recorded cash operating margins of 89% from royalty and streaming interests. We closed the previously announced senior secured silver stream referenced to 100% of future stream from the Horne 5 property owned by Falco Resources. We also repaid in full our revolving credit facility. We now have CAD450 million available on our credit facility.

We acquired for cancellation 852,500 common shares of the Company for CAD10.2 million on our NCIB, the normal course issuer bid, at an average of CAD11.96 per share. We also declared a quarterly dividend of CAD0.05 per common share paid April 15th, 2019, for shareholders on that record

date.

We're going to talk first about the Renard impairment that we took this quarter and I'm going to pass to Elif Levesque to run you through that.

Executive
Elif Levesque

Good morning, everyone. One of our cornerstone assets is a 9.6% undivided interest in all diamonds produced from the Renard Mine in Canada, as you know, and it's actually secured ranking in terms of its position. And in March 28, 2019, Stornoway, the operator of Renard Mine, announced significant impairment charge, which was CAD83.2 million on the Renard Mine, which was reflecting an outlook of lower-than-expected diamond pricing. And this was determined to be an indicator of impairment and we had to actually test our asset as well, and it results in impairment of CAD38.9 million, CAD28.6 million net of income